Flaherty Has a Plan!

Finance Minister Jim Flaherty announced today that “we have a plan”! This is such a relief to all Canadian workers. We can now all rest well at night knowing that the Finance Minister is on the case.

Responding to pressures to explain how the minority Conservatives will reduce the ballooning federal deficit[1] they created by transferring billions of dollars of speculative debt from the balance sheets of the big banks onto the backs of Canadian workers following the G20 summit Flaherty said, “Temporary spending will end. We'll use the surplus first of all to pay off the deficits we incur now.”[2] Where the “surplus” is come from Flaherty doesn’t say.

Today it was also announced by Stats Canada that productivity by Canadian workers grew 0.3% over the first three months of the year. This was said to be “largest gain Canadian businesses have posted in two years”.[3] The Globe and Mail report showed that the decline in overall output fell 1.9% from the previous quarter while the number of hours worked by Canadians was reduced by 2.2%, hence the 0.3% gain in “productivity”.

The report also showed that “labour costs” were lower due to the falling rate of wage increases which fell from 1.5% to 1.2%. Inventories were high even as workers were slashed from payrolls. The report concluded that the trend is far from over and that much more “harsh corrections” are required. Beata Caranci, director of economic forecasting at Toronto-Dominion Bank was quoted in the G&M article as saying, “They're (employers) going to have to become far more aggressive”.

It was noted that the inventories are going to have to be reduced by $70 billion over the next year. In a foot note it was pointed out that a “scale-back” in oil sands activity was also identified as “boosting” efficiency.

So what is Flaherty’s “plan”? Cut wages, throw more workers out of work and work the remained longer. Oh and make sure that “temporary programs” for worker relief are axed as quickly as possible. This is good plan if you are a banker because the gains made in all this increased productivity will be paid back to you with interest for the loans Canadians made to the banks so that the banks could loan the money back to the federal government for Flaherty’s “temporary programs”. This is one big shell game on the backs of workers.

[1] Globe and Mail, “Deficit swells from $34-billion to $50-billion – in 4 months”, May 27, 2009
[2] Globe and Mail, “We have a plan to return to surplus: Flaherty”, June 16, 2009
[3] Globe and Mail, “Productivity rises through deep job cuts”, June 16, 2009